The ECB has pledged enough stimulus to return
euro-area inflation to its goal, policy maker Bostjan Jazbec said, in a
sign that officials may sit tight over the summer months. “At the
current juncture, I’d firmly confirm that the measures work and that we
can only look forward to responding to everything that comes to our
table,” Jazbec, the Slovenian central-bank governor, said. “Of course, if you ask is there
anything more we can do, my answer would always be yes. But is it needed
today? No.” Inflation has missed the ECB target of just under 2% for
more than 3 years & hasn't been above zero since Jan,
prompting the Governing Council to ramp up stimulus yet again in Mar.
While economists see fresh measures being needed
before the end of the year, Jazbec said updated staff forecasts indicate
that the central bank's existing measures could be sufficient. Projections published this month, showing that inflation should average
1.6% in 2018, are “exactly close to our goal,” he said. His comments come amid intl concern that
central-bank policies are near the limit of their effectiveness &
pressure for govs to be more proactive. ECB pres Mario
Draghi said that delaying structural reforms in the euro
area for domestic political reasons would slow the impact of monetary
stimulus & come with an economic cost that is “simply too high.”

Confidence among American consumers in Jun eased from an almost
one-year high as favorable views about personal finances were offset by
concerns about the economy’s prospects. The University of Michigan preliminary index of sentiment cooled to
94.3 from 94.7 in May. The projection
called for a reading of 94. Consumers rated their current financial situation stronger than at
any time since 2007, reflecting improved wage gains & low inflation.
At the same time, households didn’t see the economy growing as fast as
last year. “Anticipated gains in inflation-adjusted incomes rose to the highest
levels since the January 2007 peak,” Richard Curtin, director of the survey, said. “Indeed,
compared with a year ago, the sole reason for more favorable financial
prospects was lower inflation.” Over the next 5-10 years, they project a 2.3% rate of
price growth, the lowest in records going back almost 5 decades. It
was 2.5% in the prior month. Respondents expected a 2.4% inflation rate in the next year, matching the May survey as the lowest since Sep 2010. The current conditions index, which measures Americans' perceptions
of their personal finances, advanced to 111.7, the highest since last Jul, from the prior month's 109.9. The gauge of expectations six months from now declined to 83.2 from 84.9 that was the best since Jun 2015. The report showed a measure of buying conditions for the purchase of
durable goods such as automobiles rose to the highest level this
year.

Oil prices dropped as investors braced for
another likely rise in the US oil rig count this week & as a strong $ again weighed on demand for crude futures denominated in the
greenback. A slide in equity prices also pressured futures. More sabotage of Nigeria's oil industry by rebels had limited
losses earlier in the session. The Niger Delta Avengers
group blew up the Obi Obi Brass trunk line for oil run by ENI, adding
to the woes of Africa's largest oil economy. Oil remained on track for a weekly gain, although that
could change if prices slipped further on the weekly reading for the
US oil rig count. Baker Hughes said last week US oil drillers added 9 rigs in the
week, bringing the count up to 325, as oil prices traded
above or near $50. That was only the 2nd time this year that oil rigs had risen. Prior to that, drillers cut on average 10 oil rigs per week this year,
after reducing on average 18 rigs per week last year, on worries of
oversupply.

Stocks are being sold ahead of the FOMC meeting next week, even though bets are Janet will not do anything. Oil has been having a good week, but much of that strength comes from supply outages, which are temporary. Production in Canada is ramping up & outages from Nigeria are always a threat. Dow is back down to 17.9K, trying to break thru 18K as it has been doing for months. Economic data behind the sideways trading has been disappointing.